Realtors work to build business for a future upturn

Tuesday

Sep 30, 2008 at 12:01 AMSep 30, 2008 at 3:12 PM

When Sally Rode of Coldwell Banker Premier tells new acquaintances she’s a Realtor, she usually gets knowing looks and a sympathetic smile. “Everyone knows what it’s like for us,” said Rode. “I keep telling them it’s temporary and things will pick up. We’re all just trying to stick it out right now until things get better. And things will get better.”

Alex Gary

When Sally Rode of Coldwell Banker Premier tells new acquaintances she’s a Realtor, she usually gets knowing looks and a sympathetic smile.

“Everyone knows what it’s like for us,” said Rode, who was laid off from Hamilton Sundstrand after 13 years, then began selling real estate in Coldwell Banker Premier’s Belvidere office. “I keep telling them it’s temporary and things will pick up. We’re all just trying to stick it out right now until things get better. And things will get better.”

Rode was one of seven Realtors interviewed by the Register Star in 2006 who entered the business in 2005 or 2006, when the market was the best in home-selling history.

Nationally, sales set records for five straight years. Locally, the number of sales by Rockford Area Realtors members exploded from 5,484 in 2000 to 7,192 in 2006. The average sale price of a home jumped from $106,149 to $143,270.

But that’s so two years ago.

Sales fell 19 percent in 2007 and are down 37 percent through August. The average sale price was flat in 2007 and is down more than 3 percent in 2008. A record wave of foreclosures forced many lenders out of business; those still operating have raised credit standards, locking many would-be buyers out of the market.

The tough times have driven out the less-driven. In 2006, the Realtors association’s membership peaked at 1,237. It fell to 1,166 members in 2007 and to 1,060 as of April.

But the seven Realtors we talked to in 2006 are toughing it out.

“I’d be lying if I said I hadn’t thought about” trying something else, said Keith Donnell, who spent 32 years in the radio business before joining Dickerson & Nieman Realtors in 2006.

Donnell spent that year establishing himself, then saw sales increase in 2007 in what was a down year for most everyone else. This year, though, sales are down significantly.

“My wife works, but I’m the major breadwinner, and we’ve tightened up our spending,” he said. “I’m still in it because I love what I do. I like working with first-time homebuyers. I like doing open houses. You pick up a lot of clients from open houses. We’re committed to seeing this through.”

Michelle Romano-Huber of Century 21 Country North said she’s 12 credit hours away from a bachelor’s degree but has no thoughts of heading back to college.

“Your success is based on how hard you work. My focus is to continue to get my name out there,” the 26-year-old said. “I go to every one of my husband’s softball games because I know I’m going to get at least one chance to meet someone new and tell them what I do.”

In real estate, particularly in a market correction like this, only the strong survive, Romano-Huber said.

“A lot of people were doing real estate as a hobby because a lot of sales were just falling into their laps. The Realtors in it now know they have to put the time in, and our clients can see that. They know it isn’t easy.”

The ever-changing financial landscape complicates things as well. Just this month, the federal government took over mortgage giants Freddie Mac (the Federal Home Mortgage Corp.) and its larger sibling, Fannie Mae (the Federal National Mortgage Association), and announced a $700 billion bailout plan for the rest of the financial sector.

“We have a lot of loan officers talking to us. Things are changing, but when one door closes, another usually opens,” said Mori Jo Meling of Dickerson & Nieman, who said her sales this year are down 25 percent to 50 percent.

“You just have to keep educating yourself and your clients. I have people with challenging credit getting loans. They just have to put in the effort to raise their credit scores,” said Meling, a former executive at a social service agency. “What you are seeing now are the people who are really committed to finding the right house in the market. In the end, they are going to do well. There are great buys out there now.”

Jairo Alvarez of Coldwell Banker Premier said much of the work he’s doing won’t pay dividends for a year or more. The 33-year-old has worked hard to build up his client base among the area’s rapidly growing Hispanic population. Many of the families are recent immigrants with little to no credit history.

“The financing has become very challenging. A lot of the time I have to sit down with them and create a plan to establish credit and build their scores,” said Alvarez, who was working in a warehouse in Elk Grove when he entered real estate. “A client with even a little issue in their credit can take three to six months to clear up.”

Denny Cravatta of Byron, who sells real estate for Whitehead Inc. Realtors, is discouraging his clients from listing their homes unless they have to.

“My clients are my friends, and I’m telling them to wait until there’s a better market,” said the 54-year-old, who took up real estate after retiring from Exelon Nuclear. “I’m in a different place than a lot of Realtors. It’s something to keep me off the golf course, but I want my clients to be happy, and now is not the time to sell. There’s too much inventory already.”

Bob Mandala is also in a different place than the others. Ninety-nine percent of his business is commercial, which hasn’t been hit nearly as hard as the residential side.

“My numbers should fall where they were” in 2005, he said. “Land is pretty stagnant. I’m having the best luck selling commercial buildings and leasing. There aren’t the big deals out there right now, but there are a lot of smaller deals, companies looking to find a little more space or a little better location.”

Mandala, who sold a 50-year-old family pizza business to go into real estate for Whitehead, said he doesn’t see doom and gloom when he goes into the office. He sees professionals knowing that better times are ahead and doing what it takes to make it there.

“I don’t know if the last punch has been thrown, and right now, no one really knows what will happen” with the federal buyout package proposed Sept. 19, Mandala said. “People are pulling together and helping each other get deals done. The phone is still ringing. Not as much as it once was, but it’s still ringing.”

Selling in an economic downturn
Rod McKinnis of McKinnis Consulting Group in Chandler, Ariz., offers these tips for realty success when the markets go sour:

1. Focus on what you can control. Beware of recession talk detering you from achieving sales success — it’s a trap. These are things beyond your control. Focus on what you can control, such as your relevant sales activity. What are the activities that lead you to closing sales? In basic sales models, these activities are attempts (making phone calls, attending networking events), generating contacts and scheduling appointments.

2. Increase your relevant activities, particularly contacts. Each salesperson has a formula for success: A certain number of dials leads to a certain number of contacts, which leads to a certain number of appointments, which leads to one closed sale.

In an economic downturn, don’t fret. Just elevate your sales activity with an emphasis on contacts. Make more dials to achieve more contacts and appointments. Sales is a contact sport. It’s very simple: More contacts equal more sales.

3. Manage your thoughts and words carefully. High-performers think, act and speak differently. As the reports continue on the economic slowdown, it is easy to fall victim to negative thoughts and negative talk in regard to your sales forecast. Be encouraged to think and speak to your success, and maintain a positive outlook. In the words of Henry Ford: “Whether you think you can or can’t, you are absolutely right.”

On the Web
For more about the real estate market here and nationally, go to:

realestate.msn.com: MSN Real Estate offers a compendium of information, from buying and selling homes to lawn care and landscaping to foreclosure listings and a home-affordability calculator.

raarnet.com: Rockford Area Realtors offers links for first-time buyers (FAQs, nine reasons to buy and 10 steps to buying), for finding property or an open house, and a bevy of services (with links to lenders, appraisers and other needs).

realtor.org: National Association of Realtors puts resources for Realtors, business specialists, homebuyers and sellers, and NAR members at your fingertips. Registering at the site lets you access exclusive features and sign up for newsletters.